Bitcoin Continues to Rally Despite Regulatory Crackdown on Digital Asset Exchanges in the U.S.

Stay up to date with our monthly market commentary:

• Crypto exchanges Kraken investigated by the SEC
• Binance pleads guilty to various charges by the DOJ
• Bitcoin continues its upward trajectory despite anti-crypto regulatory actions
• Bitcoin (BTC) is up 9.7%, while Ether (ETH) is up 12.9% versus last month.*

Market Overview - November

The price of Bitcoin (BTC) increased by 9.7% in November, reaching a new yearly high of $38,300 at one point.

With that price increase, Bitcoin once again proved its robustness in times of crisis. While there might have been more successful crypto assets, at least in terms of price increase, the value of Bitcoin continued to grow. 

However, November was a month of mixed emotions. 

On the one hand, we saw an increase in users across the entire digital assets ecosystem, numerous updates from a range of protocols, and a green month for most of the market.

On the other hand, regulatory actions were taken by the SEC against crypto exchange Kraken and several other crypto ventures, and we saw a criminal sentencing by the DOJ against Binance. 

In order to continue operations, Binance agreed to pay $4.3 billion to settle the DOJ’s allegations while Changpeng Zhao (CZ) was forced to resign as CEO and plead guilty to a list of felonies, including money laundering, unlicensed money transmission, and various violations against sanctions with terrorist individuals. 

Both the SEC and DOJ sent a clear message with these actions. For the crypto asset ecosystem to still operate in the U.S., it will have to follow strict (albeit still somewhat unclear) regulations to serve U.S. customers. 

The digital asset market continued its rally in November, aided by Binance’s ability to withstand such a hefty fine and continue operations without any significant interruption. Binance’s native BNB token finished 0.4% higher than last month.

Crypto Asset Market Performance Review 

The crypto asset market continued to rally after a successful October, as many assets reached new highs in November. 

The standout performers were Solana (SOL) and Cardano (ADA), rallying 63.8% and 26.3%, respectively.

Bitcoin and Ether both had a month in the green, with price increases of 9.7% and 12.9%, respectively. Ethereum outperformed Bitcoin by integrating new layer two solutions into the ecosystem and an inflow of liquidity into the network. 

Bitcoin’s price increased steadily with a bigger push in the third week of the month. The timing is aligned with the election of Javier Milei as President of Argentina. Milei favors the dollarization of the country and backing its reserve with hard assets. He had also been outspoken about Bitcoin, leading many to believe that it could play a vital role in his future economic plans.

Most leading altcoins rallied by around 7%, with some investors suggesting that we may soon witness the next “alt season” (altcoin season), as Bitcoin has historically pushed up the values of other crypto assets when it rallies. 

For the second month in a row, Solana outperformed Bitcoin by more than 50%, becoming the top-performing crypto asset of the last month.

Several updates to the protocol and new emerging projects continued pushing the price up. The main focus of the ecosystem is to expand and make Solana more interoperable with other blockchains. 

The second-best performer was Cardano’s ADA token, with a 26.3% price increase. This can be attributed to different protocol updates, particularly an upcoming integration that would implement generative AI into the protocol, as well as an increase in users in November. This performance is even more impressive considering the regulatory pressure Cardano currently faces. 

Looking beyond digital assets, we saw both stocks and gold rally in the past 30 days. Gold (XAU) moved past the $2,000 market after a slight dip in early November, while U.S. stocks, as measured by the S&P 500 Index, rallied by 8.5%, finishing the month close to the 4,550 points mark. Fed Chair Jerome Powell announced that he expects rate drops in 2024, which led to a positive market reaction.

Bitcoin Tech Update

November was an exciting month for Bitcoin technology enthusiasts, particularly in the Bitcoin mining industry. Significant updates to mining infrastructure, new mining pools, and announcements by major Lightning Network service providers have been made.

New Mining Pool Called OCEAN Launches With a Keen Focus on Decentralization and Clean Energy

A new mining pool called OCEAN was revealed late this month. It’s a new initiative pushed by Bitcoin investors such as Jack Dorsey and longtime Bitcoin Core developer Luke Dashjr. 

The initiative aims to decentralize the Bitcoin mining industry with a new mining pool. The goal of the pool is to launch as an open and transparent poo where participants will not have to stick to the centralization of block template construction like other pools. Instead, participants can choose how they want the block headers to be configured. They’re also able to take full custody of their mined Bitcoin, whereas other pools usually collect the block reward and payout afterward. OCEAN aims to solve this by allowing pool participants to attach their BTC addresses and be paid immediately.

Marathon Digital Holdings Launches Landfill Methane Powered Mining Pilot

Marathon Digital Holdings (NASDAQ: MARA) has announced that they’ll start a pilot project in which the entire infrastructure will run on landfill methane power. 

The project will showcase the immense ESG and renewable potential the Bitcoin mining industry has, particularly as a last resort for remote areas or wasted energy stations. 

Furthermore, Marathon wants to support local grid operators with flexible load offerings. Such offerings are possible because ASICs, specific Bitcoin mining computers, can relocate the energy and heat output within minutes. They are potentially helping with energy cuts, cold-infused energy shortages, extensive heat to support other business sectors, or even heating entire residential communities.

Galoy Onboard 40,000 New Merchants With New Point of Sale (POS) Partnership in El Salvador

Galoy has been instrumental in onboarding new users to the Lightning Network. They started with their popular Bitcoin Beach Wallet, now the Blink Wallet. 

With it, they implemented a few Point of Sale (PoS) solutions and allowed users on the ground in El Salvador to accept Bitcoin within minutes. Thanks to a simple interface and the implementation of Stablesats, users can also benefit from holding the U.S. Dollar in their wallet. 

Now, Galoy is expanding and has announced a partnership with Distribuidora Morazán, the second-largest distributor of consumer goods in El Salvador. With this partnership, more than 40,000 merchants will soon have Lightning and Bitcoin available in their PoS terminals.

Institutional Interest in Bitcoin

November was an eventful month for institutional investors, with further updates to ETF applications and meetings between the SEC and BlackRock. 

BlackRock and the SEC Meet to Discuss Next Steps

Representatives of BlackRock and the SEC met in November to discuss their spot Bitcoin ETF application. 

BlackRock provided a presentation detailing how the firm could use an in-kind or in-cash redemption model for its iShares Bitcoin Trust. Such meetings are an encouraging signal for progress in the spot Bitcoin ETF approval, and could lead to further meetings between the SEC and the remaining ETF applicants. 

While we haven’t read or heard of further updates to the applications, mid-January is the next possible date for the SEC to approve.

Commerzbank Granted Custody License for Bitcoin and Digital Assets

Commerzbank, Germany’s fourth-largest bank, announced it’s become the first among its peers to secure the Digital Assets Custody License. 

The License will enable the bank to offer a wide range of digital assets, products, or services, including Bitcoin and Ether, to their clients. 

The initial step involves the creation of a robust, secure, and fully compliant platform designed to cater to institutional clients seeking secure custody solutions for their digital assets.

Bitcoin on Balance Sheets

There have been some announcements and changes to Bitcoin on Balance Sheets in November. On the one hand, we saw MicroStrategy extend their amount of Bitcoin. On the other hand, a gaming company in Hong Kong is considering adding Bitcoin and other digital assets to its balance sheet. 

MicroStrategy Buys an additional 16,130 BTC

MicroStrategy’s chairman, Michael Saylor, announced an additional purchase of 16,130 BTC, bringing the Bitcoin on the company’s balance sheet to a total of 174,530 BTC. 

MicroStrategy’s ongoing purchase of Bitcoin as a reserve asset highlights the digital currency’s use case as a cash reserve alternative for corporate treasuries.

Hong Kong Based Gaming Company Boyaa Interactive Plans on Adding Bitcoin to Its Balance Sheet

Earlier this month, the Hong Kong-based gaming company Boyaa Interactive revealed plans for a potential investment into digital assets and Bitcoin in particular. 

The company seeks shareholders’ approval to authorize a $100 million acquisition mandate for purchasing Bitcoin, digital assets, and stablecoins within a 12-month period.

‍*Closing price data is from November 30, 2023